There are various deployment options for Warehouse Management implementation in S/4 HANA, and choosing one will depend on several key factors.

This blog discusses the pros and cons of each option, to help you make the right choice for your business.

Whether you want just basic warehouse processing, or you need a best-in-class management solution for high volumes of complex data, there is a solution for your needs.

Embedded EWM

Key business benefits:

• Embedded EWM in S/4 HANA simplifies data
• Ease of deployment and more cost-effective to handle
• Reduce data redundancy with a reduction in master data duplication
• Direct integration with ERP documents
• Elimination of redundant customising and transactional document

Embedded EWM became an application component within SAP S/4HANA with on-premise edition 1610. This option aims to simplify your data, making it easier and more cost-effective to handle.

Embedded EWM is recommended for small and medium scale warehouses. The solution is ideal for warehouses within the same country as the data centre where the S/4HANA system is hosted. Warehouses with operations in multiple countries or continents may not be suitable, as these need higher response times and data volumes.

Embedded EWM is available in two licence versions. Customers can choose the deployment option based on the application of functionality to their specific business processes:

• Basic Warehouse Management provides basic warehousing processes and functions - Inventory Management, Inbound Processing, Outbound Processing, Internal Warehouse Movements, Physical Inventory and Reporting. Basic EWM functionality is included in the SAP S/4HANA ERP licence

• Extended Warehouse Management provides additional advanced warehousing functions and process optimisation - Slotting, Wave Management, TU handling, TM Integration, Dock Appointment Scheduling, Labour Management, VAS, Kitting, Cross Docking, Warehouse Billing, Cartonisation Planning, Distribution Equipment, JIT and Material Flow System Integration

Embedded EWM can only integrate to local ERP storage locations in the same system and is not released to integrate with storage locations coming from another ERP system. Future scalability requirements (transaction volume, data throughput) should be considered while selecting this option, as there may be future separate deployment requirements for EWM. 

Decentralised EWM on S/4 HANA

Key business benefits:

• Can integrate with more than one ERP system
• Better future scalability options
• Can handle a higher volume of transactions without impacting system performance of other processes
• Can be upgraded independently to ERP
• Can have independent downtimes for support pack maintenance periods
• Decentralised EWM system is operational even if the ERP system is down

SAP introduced a decentralised EWM deployment option in SAP S/4HANA 1809. SAP EWM is deployed on a separate server platform and connected to SAP S/4 HANA or any other ERP. It is the standard deployment option for new decentralised EWM implementations.

Decentralised EWM offers better future scalability options and it can handle a higher volume of transactions without impacting system performance of other processes.

EWM system upgrade cycles are independent of ERP. EWM system is operational even if the ERP system is down. EWM system can also have its independent downtimes for support pack maintenance periods.

Transfer of master data (Material, Batches, Business Partners) from ERP to decentralised EWM on S/4HANA is carried out using IDOC or web service. This is a change from when CIF was used to transfer master data from ERP to EWM systems based on Netweaver or SCM, so if you are currently using Netweaver or SCM, and you want to upgrade to S/4HANA, your master data distribution strategy will have to change for this option.

Decentralised EWM can only integrate to storage locations in other systems; it cannot integrate with local ERP storage locations in the same system.

Stock Room Management

Key business benefits:

• Simple and mature solution for warehouses with core basic warehouse management processes

In SAP S/4HANA 1909, SAP released a Deployment option for customers who would like to continue using the warehouse processes with their existing Classic LE-WM installation.

Customers who do not use complex warehouse processes and do not need advanced SAP EWM functionalities would like to have a simple, reliable, and flexible solution with core basic warehouse management processes would benefit from this option.

Stock Room Management is covered by the SAP S/4HANA Enterprise Management License. Existing LE-EWM Customers should take care to consider the functionalities that were in their LE-EWM system, but are not included in the license of Stock Room Management.

Basic Warehouse Functionalities of LE-WM in SAP S/4HANA which are also available in stock room management are:

• Inventory management
• Inbound process
• Outbound process
• Internal warehouse stock movements
• Posting changes
• Physical inventory
• Reports

Functionalities that were available in LE-WM but are not part of Stock Room Management are:

• Task & Resource Management
• Value Added Service
• Yard Management
• Cross-Docking
• Wave Management
• Decentral Warehouse Management
• Warehouse Control Unit Interface

Stock Room Management is built on the same data model as LE-WM. Stock Room Management is intended to facilitate the move from ECC to SAP S/4HANA without performing a full-fledged WM transformation.

Stock Room Management is a part of the SAP S/4HANA release and maintenance strategy, meaning this option will be maintained by SAP for your continued usage. However, SAP is not planning to invest further in Stock Room Management. Stock Room Management has the focus of supporting existing customers with currently used functionalities only. For customers wanting further innovations and increasing warehousing capabilities, EWM is a better option.

S/4 HANA Cloud Warehouse Management

Key business benefits:

• Infrastructure investment is not required to own a full-fledged warehousing solution
• Provide flexibility to adapt to changing business needs
• New capabilities, regulatory changes and best practices can be adopted with a rapid innovation cycle
• IT administrative tasks are reduced
•  Industry-standard basic Warehouse solutions are provided

With release 1811, the warehouse management functionality has been introduced in the SAP S/4 HANA cloud solution. SAP S/4 HANA Cloud Warehouse Management is available to customers as a service with Subscription pricing. In-stack (embedded) Warehouse Management deployment option is available in SAP S/4HANA Cloud Warehouse Management. Currently, there is no decentralised option for cloud.

This option provides flexibility to adapt to changing business needs. New capabilities, regulatory changes and best practices can be adopted with a rapid innovation cycle. IT administrative tasks are also reduced, and investment in infrastructure is not required to own a full-fledged warehousing solution.

Customers who want to run their basic warehouse processes with industry-standard solutions in the cloud can go with this deployment option.

With many new innovations planned in SAP roadmap, this deployment option is expected to grow in future.

For Complex warehouses operations, the option of EWM on cloud becomes less viable as they need a lot of customisation, quicker response times and constant performance monitoring.

Lean Warehouse Management

Lean Warehouse Management is LE-WM component and is mostly used to pick deliveries in a warehouse where you are not handling any stocks on storage bin level. Inventory management is at storage location level and the system does not update the stock data at storage bin level using the quants. There is no change to this solution and customers can continue to use Lean WM under S/4 HANA for lean outbound process execution.

Conclusion

SAP has provided various warehousing solutions which meet the needs of different types of Warehouses. The right deployment option is pivotal to gaining benefits from the Digital Core capabilities.

You can select the right deployment option for you by evaluating the complexity of warehouses, warehouse volume and throughput, future automation plans, existing system landscape and long-term digital transformation plans.

How can Kagool help?

Kagool provides you solutions for many challenges faced in Warehousing operations.

With our technical expertise and business process knowledge, we can help you benefit from access to the new digital supply chain capabilities in Extended Warehouse Management. We can assist you with:

• Scope and Complexity assessment and developing  a roadmap for your digital transformation journey in S/4 HANA
• Help you to select the right EWM deployment option for your warehouse
• SAP EWM implementation - greenfield implementation or migration from SAP WM to EWM
• Optimising and stabilising new implemented EWM Solution
• EWM integration with MES system, automated systems, different type of RF Devices and printers
• End-to-End Supply chain integration with Logistics and Transportation

To see an example of our work on Warehouse Management, find our project with Cadent Gas.